2024 (4) TMI 698 - AT - Customs

Town Seizure - Absolute confiscation of gold - imposition of penalties on the firm as well as on the appellants - onus to prove u/s 123 of CA - HELD THAT - It is found that it is a case of town-seizure. Moreover the gold bars recovered were having no markings and having purity of 99.96%. In that circumstances the Revenue has failed to discharge their onus how they form an opinion that they have a reasonable belief that the gold is of foreign origin and smuggled one. Moreover the appellants have been able to prove by producing various documentary evidences like their Books of Accounts and certification from M/s G.N.H. R P Ltd. Kolkata and the appellants have also produced certain Hall Marking issued by them from time to time. In that circumstances the appellants were able to discharge their onus of procurement of gold through licit means in terms of Section 123 of the Customs Act 1962. The gold in question cannot be held liable to be confiscated. Consequently the order for confiscation of gold in question is set aside and as the gold in question is not liable for confiscation therefore no penalties can be imposed on the appellants. The impugned order set aside - appeal allowed.

Summary

Issues involved: Appeal against absolute confiscation of gold and imposition of penalties.

Facts of the case:
The case involves the recovery of gold in biscuits and bars form at a workshop, leading to the investigation and seizure of gold believed to be of foreign origin. The gold was seized from individuals present at the workshop, and further statements and investigations revealed the involvement of the proprietor of M/s M.M. Jewels in sending gold for melting purposes. The premises of M/s M.M. Jewels were searched, and documents were produced to show the procurement of old gold jewelry for refining purposes. Testing confirmed the purity of the gold, and the appellants sought provisional release, which was denied. Subsequently, proceedings were initiated for confiscation and penalties.

Appellant's argument:
The appellants claimed to deal with old gold jewelry, maintaining records and procuring gold through licit means. They argued that the gold in question had no foreign markings and was of high purity, indicating town-seizure rather than smuggling. The appellants presented documentary evidence, including books of accounts and certifications, to prove legitimate procurement. They contended that the Revenue failed to prove the gold's foreign origin, thus it should not be confiscated, and no penalties should be imposed.

Revenue's stance:
The Revenue supported the impugned order for confiscation and penalties.

Judgment:
The Tribunal found it to be a case of town-seizure, where the gold lacked markings and had high purity. The Revenue failed to establish a reasonable belief regarding the gold's foreign origin or smuggling. On the other hand, the appellants successfully demonstrated legitimate procurement through documented evidence. Therefore, the Tribunal held that the gold could not be confiscated, leading to the setting aside of the impugned order and allowing both appeals with no penalties imposed.

*(Pronounced in the open court on 17.04.2024)*